* U.S. CPI and Fed decision awaited
* Bank of Thailand seen holding interest rate - Reuters poll
* Indonesian stocks lowest since Nov. 2023
By Adwitiya Srivastava
June 12 (Reuters) - Asian currencies held steady on
Wednesday, while most equities notched modest gains ahead of a
key U.S. inflation data as well as monetary policy decisions by
the Federal Reserve and the Bank of Thailand.
The South Korean won and the Malaysian ringgit
inched up, while the Singaporean dollar, the
Taiwanese dollar, and the Chinese yuan
barely moved against the greenback.
In Thailand, the baht and equities were
steady ahead of the central bank's monetary policy decision in a
few hours time. A poll of 27 economists by Reuters showed the
Bank of Thailand (BoT) would leave its key interest rate
unchanged.
"The BoT will likely remain steadfastly on hold despite
continued political pressure to cut rates," analysts at Barclays
wrote in a note.
"While there are media reports that the government may be
trying to increase its influence on the bank through the post of
the BoT board chair – which becomes vacant in September – we
note that the chair does not sit on the monetary policy
committee."
Thai Prime Minister Srettha Thavisin on multiple occasions
earlier has called for rate cuts, citing the need to boost
Southeast Asia's second-largest economy, and is hoping for a
rate cut later in the day.
Meanwhile, investors widely expect the Fed to stand pat on
its key interest rate later in the day. Market is now pricing in
an around 52% chance of a rate cut in September, down from
around 61% a month ago, according to CME FedWatch tool.
Asian central banks have been on wait-and-see mode, as
sticky inflation and tight labour market in the U.S. keep
shifting expectations on when the Fed will cut rates and by how
much.
"Asia FX could face volatility from a potential upward shift
in the Fed's median dot plot, which could push U.S. yields and
the dollar higher," analysts at MUFG said.
They added that low-yielding currencies such as the South
Korean won, Thai baht, and Malaysian ringgit could be
vulnerable.
Elsewhere in Southeast Asia, stocks in Jakarta fell
as much as 0.5% to hit their lowest level since mid-November,
while rupiah ticked lower, flirting with a
psychologically crucial level of 16,300 per dollar.
Stocks in Kuala Lumpur were up 0.2%, while Taiwanese
stocks ascended almost 0.8%.
Financial markets in the Philippines were
closed on Wednesday for the Independence Day holiday.
HIGHLIGHTS:
** Bank Indonesia to use all monetary instruments to
stabilise rupiah
** Philippine c.bank wants inflation firmly settled near
target midpoint
** Indonesian 10-year benchmark yields largely flat at
7.022%
Asia stock indexes and currencies at 0320 GMT
COUNTRY FX RIC FX FX INDE STOCKS STOCKS
DAILY % YTD % X DAILY YTD %
%
Japan -0.08 -10.2 <.N2 -0.79 16.64
6 25>
China EC>
India 0.00 -0.43 <.NS 0.00 7.06
EI>
Indonesi -0.03 -5.49 <.JK -0.11 -5.84
a SE>
Malaysia +0.06 -2.63 <.KL 0.23 11.04
SE>
Philippi - -5.64 <.PS - -0.62
nes I>
S.Korea 11>
Singapor +0.02 -2.46 <.ST 0.16 2.29
e I>
Taiwan +0.03 -5.09 <.TW 0.79 22.49
II>
Thailand -0.05 -6.98 <.SE 0.10 -6.95
TI>
(Reporting by Adwitiya Srivastava in Bengaluru; Editing by
Rashmi Aich)
